News Links, November 1, 2017

In an environment where central banks have crushed yields, investors have become so desperate for any yield they can get, no matter what the risks, that borrowers are totally taking advantage of this desperation.

## Airline death spiral ##The Fat Years for U.S. Airlines Are Coming to an EndWhile summertime profits were fine, and travel demand remains robust, a number of airlines are facing higher bills from a variety of factors: labor contracts, significant airport renovation projects, technology spending, and fleet upgrades.

South Korea will buy more U.S. weapons, develop more advanced missiles and receive a more consistent presence of U.S. military nuclear weapons to defend against North Korea, according to agreements reached between top U.S. and South Korean military leaders that concluded in Seoul Saturday.

Bahrain Wants Qatar's GCC Membership FrozenIn a series of messages on Twitter, Al Khalifa said that Bahrain would not attend the next GCC meeting if Qatar is present, and criticized it for refusing to comply with the demands of the Saudi-led coalition that had imposed a blockade on Qatar.

Beyond the well-publicized military build up on man-made islands in the South China Sea, China has built up its fleet of fighters to the extent that it operates a daily, aggressive campaign to contest airspace over the East China Sea, South China Sea and beyond, U.S. military officials here in the region said. China has also taken several other non-military steps that are viewed as attempts to make it much more difficult for the U.S. to operate there and defend allies in the future.

President Donald Trump has scrapped environmental regulations and supported fossil-fuel production in the first year of his presidency. But if success of such policies is judged by the price of gasoline, there's little to show. By every measure of affordability, the cost of filling up has increased relative to the major economies of the world.

China's mangrove swamplands are disappearing at an alarming rate. These saltwater marshes, unique to tropical and subtropical areas such as southern China's Pearl River Delta, serve as spawning grounds for aquatic life, major stops for migratory birds and shields for coastlines. However, mangroves have grown expendable in land-scarce coastal regions as land reclamation became an easy path to higher tax revenue, economic growth and better livelihoods for locals.

## US ##The Bitter Irony about Today's "Real Disposable Income"In the data today on personal income and outlays for September was a hefty shot of reality that many Americans have been feeling in their wallets on a daily basis: On a personal level, per individual, or "per capita," the disposable income adjusted for inflation looks lousy. In fact, it declined in September and has been declining since May.

Border control procedures were also a persistent annoyance for passengers, something IATA says could be solved through the increased use of biometric data. Passengers are warming to that idea as well – Over 82% want to use a 'digital passport' and 64% would be happy for biometrics to be used as the form of identification.

Disappointing Output Betrays Exxon, Chevron Profit VictoriesExxon churned out the equivalent of 3.97 million barrels a day, short of the 4-million average estimate from analysts. Chevron's tally was 2.717 million barrels a day, underperforming its 2.777-million average estimate. In both cases, the figures rattled investors, even as the U.S. oil giants easily beat estimates on their overall earnings.

You still have to wonder what exactly Trump meant by those tweets. Did he mean that US oil companies should have loaded up all Iraq's oil in tankers and taken it away? Or that the US was supposed to militarily occupy Iraq's oil fields? -- RF

More than eight million tons of plastic are dumped into the world's waters each and every year, according to the nonprofit network Plastic Oceans. That trash causes the death of more than 100,000 marine animals and one million seabirds every year, the United Nations reported. Should this trend continue, plastic will outweigh fish in the ocean by the year 2050.Science Says: Jack Frost nipping at your nose ever later

The Democratic Money Behind Russia-gateThe two sources that originated the allegations claiming that Russia meddled in the 2016 election — without providing convincing evidence — were both paid for by the Democratic National Committee, and in one instance also by the Clinton campaign: the Steele dossier and the CrowdStrike analysis of the DNC servers.

Facebook is effectively sowing disinformation by kowtowing to foreign regimes and censoring atrocities such as ethnic cleansing in Myanmar. In the name of repressing fake news and hate speech, Facebook is probably suppressing far more information than Americans realize.Hillary Clinton Keeps Pointing FingersBecause of the failure of the corporate press to report fully on Hillary Clinton's policy failures throughout her career, it was difficult for voters to perceive how dangerous her presidency might have been, although many Democratic voters bolted to Bernie Sanders and enough Americans voted against her last November to give Donald Trump his narrow Electoral College victory.

Guardians of the Magnitsky MythIn pursuit of Russia-gate, the U.S. mainstream media embraces any attack on Russia and works to ensure that Americans don't hear the other side of the story, as with the Magnitsky myth.

## Systemic breakdown/collapse/unsustainability ##What Could Pop The Everything Bubble?As central bank policies are increasingly fingered by the mainstream as the source of soaring wealth-income inequality, policies supporting credit/asset bubbles will either be limited or cut off, and at that point all the credit/asset bubbles will pop.

Politicians admitting that overpopulation is a problem? I'm shocked! Of course, the reason they dare to bring it up in this instance is to tie the problem in with immigration. Nevertheless, (human) overpopulation is real. -- RF

But it's a big mistake to believe that Trump is unique in this respect. Even a cursory look at the deeds and behavior of the world's leaders, past and present, reveals rampant unhinged, depraved, and childish behavior. Trump is awful, but don't fall prey to the simple-minded and naive belief that if Trump is replaced with someone else, the situation will "get better." -- RF

A new analysis from the Bipartisan Policy Center adds new disaster relief spending and the costs of GOP tax-cut plans to earlier projections from the Congressional Budget Office. Its conclusion: The deficit could reach $1 trillion as early as 2019 – four years earlier than the CBO calculated in January.

However, its unfunded liability climbed to $73.4 billion at the end of fiscal 2017 from $71.4 billion in the prior year because the state's pension contribution continued to fall below actuarially required levels.

AAPA: Extra security costs are highNew extra security rules that the US and some other countries are imposing on all inbound foreign flights are causing significant hassle for passengers, airlines and airports and are costly to implement.

U.S. Deepwater Offshore Oil Industry Trainwreck ApproachingThe U.S. Deepwater Offshore Oil Industry is a trainwreck in the making. The low oil price continues to sack an industry which was booming just a few short years ago. The days of spending billions of dollars to find and produce some of the most technically challenging deep-water oil deposits may be coming to an end sooner then the market realizes.

The oil majors are reaping the benefits of deep cost cuts, but they're still not doing quite enough. The target: being able to fully fund dividends and investments at $40, or even $30 a barrel, according to BP Plc Chief Executive Officer Bob Dudley.

So, still more cost cutting is needed. But as we've seen, spending on exploration and development has already fallen far below the reserve replacement rate. The promise of further spending cuts doesn't sound very encouraging. -- RF

What Did Hillary Clinton Know?With the disclosure that Hillary Clinton's campaign helped pay for the original Russia-gate allegations against Donald Trump, a new question arises: what did Clinton know and when did she know it?

NYT's Assault on Press FreedomThe New York Times, which once postured as the champion of a free press, now is seeking crackdowns on news that the public gets from the Internet under the guise of combatting "Russian propaganda."

Getting the Left to Embrace US 'Exceptionalism'Neocons have deftly used the Left's hatred of President Trump and the demonizing of Russia to lure liberals and progressives into an interventionist mindset to defend "American exceptionalism."

This is a textbook example of declining marginal return and the cost of complexity, which are factors which bring down societies and civilizations. Each incremental technological advance requires greater inputs, thus the colossal expense. And the final product is so complex that it's a challenge just to make it work. -- RF

Rising Rents Are Pushing More Tenants Past the Breaking PointRents have increased rapidly across U.S. housing markets as the share of renting households has risen faster than the number of new units. Now, in a survey published Thursday by an apartment-listing service, nearly one in five respondents reports struggling to make the monthly payments.